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Environmental Technology
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China is the world’s largest market for environmental technology products, growing at an average annual rate of 12.8 percent from 2017 to 2021. In 2022, the country’s environmental protection industry generated $329 billion in operating income, accounting for 1.8 percent of GDP and employing over 3.2 million people. Environmental protection and climate change are high-priority policy issues for the Chinese government, which continues to implement policies targeting pollution prevention, soil remediation, and the enhancement of environmental infrastructure. Key areas of focus include air quality improvement, wastewater treatment, and solid waste management including hazardous waste disposal. 

Leading Sub-sectors

Air Pollution Monitoring & Control 

While China has made progress in improving air quality, air pollution remains a serious public health issue, contributing to over 2 million deaths annually. According to the Ministry of Ecology and Environment, in 2024, China’s annual mean PM2.5 concentration was approximately 29.3 µg/m³ (still above World Health Organization guidelines, which state that annual average concentrations of PM2.5 should not exceed 5 µg/m³) with more than 30 percent of Chinese cities failing to meet national air quality standards for PM2.5. After stagnation in 2023, China’s overall air quality showed improvement in 2024, with a decrease in national average PM2.5 levels. However, several provincial capitals, particularly in northern and central China, saw significant year-on-year increases in PM2.5, including Harbin (72 percent), Yinchuan (56 percent), Beijing (46 percent), and Changsha (44 percent). Unfavorable weather conditions and haze pollution episodes continue to impact regions, especially in winter. With an aging population increasingly vulnerable to air pollution, the urgency to improve air quality for public health protection has grown.

Given the PRC’s heightened focus on tackling air pollution and reducing emissions from heavy polluting industries, there are significant opportunities for U.S. companies offering advanced technologies for air quality monitoring and emission reduction. U.S. firms with expertise in innovative sensors, real-time monitoring systems, and remote sensing technologies will be well-positioned to tap into the growing demand from both government initiatives and private sectors. Additionally, emission control solutions, such as advanced filtration systems, are in high demand, especially for industries like power generation, steel manufacturing, and chemicals. 

Water 

China’s population represents about 18 percent of the world’s total, while its water resources account for only 6 percent of the global supply. Rapid urbanization and industrialization over the past four decades have posed significant challenges to ensure a sustainable water supply for both drinking and industrial use. According to China’s State Council, by 2025, the country aims to achieve a sewage treatment rate of over 95 percent in county-level areas and increase the recycled water utilization rate to more than 25 percent in water-scarce cities at the prefecture level and above. In 2023, the rural residential sewage treatment rate exceeded 40 percent. This underscores a growing demand in China for advanced technologies in water cleaning and recycling.

Wastewater Treatment: China has set ambitious targets to enhance wastewater treatment infrastructure. Based on the latest City and Township Sewage Treatment and Resource Utilization Development Plan issued by the National Development and Reform Commission (NDRC), Ministry of Housing and Urban-Rural Development (MOHURD), and Ministry of Ecology and Environment, by 2025, China will achieve a sewage treatment rate of over 95 percent in county-level cities and a recycled water utilization rate of over 25 percent in water-scarce prefecture-level cities. A January 2024 guideline from the plan also integrates sewage treatment with carbon emission control, with 100 low-carbon treatment plants set to be built by 2025. Additionally, the plan calls for expanding and renovating 45,000 kilometers of sewage collection networks and increasing sewage treatment capacity by 12 million cubic meters daily. These initiatives create opportunities for U.S. companies to bid on public projects and explore public-private partnerships in areas like sewage pipeline maintenance, treatment of polluted water bodies, and wastewater facility construction in second- and third-tier cities.

Sludge Treatment: As of 2024, China’s annual sludge production has exceeded 70 million tons. The most recent implementation plan, released in 2022 by the NDRC, MOHURD, and the Ministry of Ecology and Environment, mandates an additional 20,000 tons per day of sludge treatment capacity by the end of 2025, aiming for a treatment rate above 95 percent in county-level and larger cities. China’s sludge typically has low organic matter but high silt and heavy metal content. Key market opportunities in this sector include sludge dewatering technologies, environmentally friendly chemicals, high-automation blending and injection equipment, cost-effective and energy-efficient incineration methods, and resource-efficient sludge recycling solutions that minimize secondary pollution while reducing CO₂ and methane emissions.

Water Reuse: Under the 14th Five-Year Plan, China aims to add 15 million cubic meters per day of reclaimed water capacity by 2025. The Ministry of Water Resources and NDRC also target a recycled water utilization rate above 25 percent in water-scarce cities. In 2023, China’s water reuse market generated $2.07 billion and is projected to reach $4.06 billion by 2030, with reverse osmosis membrane filtration leading growth. To address water scarcity, China has launched initiatives such as pilot programs in six industrial sectors, including petrochemical, iron and steel, nonferrous metals, papermaking, textiles, and food for wastewater reuse and “sponge city” projects in 90 cities to enhance rainwater absorption and flood control. Given China’s strong demand for advanced filtration, U.S. companies specializing in reverse osmosis membrane filtration have a substantial competitive advantage in the Chinese market and collaborating with local entities while aligning with China’s regulatory frameworks can further enhance market entry and success.

Solid Waste 

In 2021, China’s Action Plan for Reaching Carbon Dioxide Peak Before 2030 outlined strategies for achieving carbon peak by 2030, focusing on resource recycling and waste reduction. The 14th Five-Year Plan (2021-2025) emphasizes these goals, with the State Council setting guidelines to establish a comprehensive waste recycling system by 2025, aiming for full development by 2030. The resource recycling industry is projected to reach $697 billion by 2025. While progress varies, regions like Southwest, South, East, and Central China are leading in solid waste management. U.S. providers of municipal solid waste, ordinary industrial waste, and hazardous waste products and solutions will likely find growing demand for such solutions in the Chinese market. 

Municipal Solid Waste: As of 2023, China treated 254 million metric tons of municipal waste, shifting from landfills to incineration due to land shortages, illegal dumping, and public opposition. With 927 incineration plants and over 300 waste-to-energy facilities, China has one of the world’s largest capacities, though rapid expansion has outpaced the industry’s ability to manage byproducts like fly ash, furnace slag, and toxic pollutants. According to the China State Council’s 2025 Report on the Work of the Government to the National People’s Congress, key opportunities exist for U.S. companies, including advanced sorting machines to improve efficiency from 75 percent to 98 percent and biological enzyme technologies to replace conventional incineration. Several large-scale waste treatment facilities are also planned, creating demand for sorting equipment. Additionally, China is introducing a certification system for recycled products and considering a mandate requiring 30 percent of materials in government projects to be certified recycled, driving demand for high-quality recycled products. Further opportunities exist in leachate treatment, landfill services, automated waste sorting, kitchen waste reduction, and oil recycling, given China’s potential for biofuel production. Success will require alignment with China’s regulatory frameworks and strategic local partnerships.

Ordinary Industrial Waste: Ordinary industrial waste makes up about four-fifths of China’s solid waste, with production rapidly increasing. In 2022, China generated 4.11 billion tons of ordinary industrial waste, up from 3.97 billion tons in 2021. The bulk of this waste is concentrated in five provinces—Shanxi, Inner Mongolia, Hebei, Liaoning, and Shandong—which together accounted for 45 percent of the total in 2021. These regions are the heart of China’s heavy industries, including mining, steel, coal production, and petrochemicals. U.S. companies offering integrated services, including on-site transportation, treatment, disposal, and recycling, will find opportunities in these areas. Opportunities exist for U.S. companies specializing in fly ash disposal, phosphogypsum and red mud management, waste sorting and recycling, construction waste utilization, and industrial residue handling. 

Hazardous Waste: China’s hazardous waste production is projected to reach 200 million tons by 2030, growing at a 3 percent annual rate. However, disposal capacity is still lagging, with a hazardous waste utilization rate of around 47 percent. Major production centers include Shandong, Jiangsu, and Zhejiang, while western regions like Xinjiang, Qinghai, and Sichuan face significant gaps in disposal capacity. The majority of hazardous waste comes from industries such as chemical manufacturing, non-ferrous metal smelting, petroleum processing, and power generation. In recent years, the government has increased focus on hazardous waste management, especially since revising the Solid Waste Law in 2020. Regulatory enforcement has become stricter, though navigating complex licensing and competition from domestic companies remains a challenge for foreign operators. Opportunities exist for U.S. companies that offer products like heavy metal chelating agents, solidification compounds, medical waste disposal solutions, and specialized hazardous waste management services.

For further details on opportunities in China’s Environmental Technologies market, please consult the International Trade Administration Top Markets Environmental Technologies Report at www.trade.gov.  

Resources

  • IE Expo China – Shanghai, April 21-23, 2025
  • The China International Environmental Protection Exhibition & Conference – Beijing, April 10-12, 2025
  • WieTeC – Shanghai, June 3-5, 2025
  • IE Expo Chengdu – Chengdu, June 25-27, 2025
  • IE Expo Guangzhou – Guangzhou, September 17-19, 2025